Ex-Richmond Chief Has Left Long Trail Of Fiscal Questions

Walter L. Marks arrived in Kansas City, Mo., to take the job as
superintendent of public schools with a resume that contained both
educational high marks and fiscal question marks.

While his innovative magnet-schools program in Richmond, Calif., has
won him praise from many, Mr. Marks's financial management of the
district, which he ran until last December, has also been called into
question.

Mr. Marks's career, particularly his experience in Richmond,
illustrates the difficulty school boards have in overseeing the
administration of ambitious educational reforms.

The Richmond magnet-schools program was "all just based on hope,"
said Thomas A. Shannon, executive director of the National School
Boards Association. "School-board members were desirous of improving
the instructional program, and here was a school administrator who
could show them how to do it."

"It was a wonderful program," he added, "but the problem was they
couldn't afford it."

The Richmond Unified School District recently made history when it
required a $19-million state bailout after running up a projected
$23.5-million budget deficit. (See Education Week, May 8, 1991.)

Responding to the Richmond bankruptcy, a California grand jury and
state auditors are investigating, and state legislators and education
officials last week called for a law that would give state officials
the authority to seize control of district finances from school boards
that overspend.

As it turns out, however, the Richmond incident, although by far the
most serious, is not the first time that Mr. Marks has been criticized
for budget mismanagement.

Mr. Marks also encountered questions about his fiscal-management
abilities during his tenure as superintendent in Montclair, N.J., and
Wake County, N.C.

But the past troubles did not stand in his way when he became a
candidate for the job in Kansas City, where the school district is
implementing the nation's most expensive and far-reaching desegregation
order.

Mr. Marks's past success with magnet schools impressed the Kansas
City school board, which hired him in February after conducting what
board members acknowledged last week were cursory checks into his
tenure in Richmond.

In an interview last week, Mr. Marks maintained that state officials
bear much of the responsibility for the Richmond collapse, and he
asserted that he has the financial and managerial skills to lead the
35,000-student Missouri school district.

"I have been a superintendent for 17 years," Mr. Marks said. "I have
balanced every budget for every district I have been in, except that
last one in Richmond. I would think that 16 or 17 years of balanced
budgets shows that I can fiscally manage."

Several school-board members who have worked with Mr. Marks in the
past said in interviews last week that they were surprised by Mr.
Marks's success in landing the high-profile Kansas City job.

In retrospect, some said that they wished they had kept a more
careful watch over Mr. Marks's budgets and that they had spent more
time probing his record.

They described Mr. Marks as charismatic, brimming with enthusiasm,
and a good salesman for his ideas.

But Mr. Shannon of the nsba said boards should not be swayed by
forceful administrators. Board members should always demand to know the
short- and long-term costs of every budget proposal, he said.

"The ultimate power in dealing with these things is through what I
call 'the power of the question,"' Mr. Shannon said. "School boards
should demand an answer. One of their functions is being the
gatekeepers of reality."

The Kansas City school board'sdecision to hire Mr. Marks provoked
protests from the state of Missouri, which, as a defendant in the
desegregation case, pays the lion's share of the remedy's costs.

State Protests Hiring

In February, the state asked the federal judge overseeing the case
to put the district in receivership, charging that it had demonstrated
repeated poor management by overspending its budget and driving up the
state's costs.

Michael Fields, an assistant attorney general, said the state
regards the board's decision to hire Mr. Marks as "another argument for
putting the district in receivership."

"The board did absolutely no background check in respect to
Richmond," Mr. Fields said. "Basically, they asked the fox how the
henhouse looked, and when the fox said, 'fine,' they said, 'O.K."'

Mr. Fields asked the Desegregation Monitoring Committee, which
oversees the case, to "take exception" to both the manner in which Mr.
Marks was hired and the fact that he was hired at all.

The committee protested the board's search process but did not take
exception to his hiring, Mr. Fields said.

Alexander P. Ellison, a board member who served on the search
committee, said he cast the lone vote against Mr. Marks because he felt
that the board "acted somewhat hastily" in selecting him.

Mr. Marks was not one of the original finalists, Mr. Ellison noted,
although he was interviewed early in the search.

Kansas City board members did not visit Richmond to interview
officials there. Instead, they telephoned "a couple of board members"
and other officials, Mr. Ellison said.

"The board was convinced that a lot of this was unjust and more or
less just allegations--that Marks was being used as a political
football," Mr. Ellison said.

Support for Marks

Mr. Ellison and other board members said they strongly support their
new superintendent.

"I think it's fair to say we probably could have done a lot more
homework," William DeFoor Jr., another board member, said. "But
probably we would have come up with the same conclusion. He's probably
the most innovative visionary I've ever met in education."

Mr. DeFoor and Arthur A. Benson 2nd, who represents the plaintiffs
in the desegregation case, stressed that they believe Mr. Marks has the
leadership skills to motivate the district to take advantage of the
resources provided as a result of the remedy ordered in the case, which
Mr. Benson estimated has cost $600 million over the past six years.

"We badly need his strengths, which include enthusiasm for racial
integration, his experience with and knowledge of magnet schools, his
relationships with teachers and parents, and his belief that urban
children can learn as well as any other children," Mr. Benson said.

Kansas City officials also point out that the court scrutiny of the
district will provide an extra layer of oversight of Mr. Marks.

In addition, they note, the district has hired a retired head of a
local corporation to consult with the superintendent for six months as
he reorganizes the central administration.

Although it is facing a $6-million budget deficit, Mr. Marks said
the district's main challenge lies in building magnet schools,
attracting students, and improving test scores.

"What is not working in Kansas City has little to do with my having
a strong financial background," he said.

Magnets Draw Attention

The 53-year-old Mr. Marks began his administrative career as an
assistant principal in Beechwood, Ohio. From there, he moved to
Montclair, N.J., where he worked as curriculum director and
superintendent and developed a magnet-schools program to desegregate
the schools without mandatory busing.

While the program drew national attention, several current and
former district officials said the plan also made Mr. Marks some
enemies.

In 1978, members of the local League of Women Voters publicly
complained that the program was causing the district to overspend its
budget and that the district was inappropriately carrying debts over
from the last month of one year to the next fiscal year.

The school board called in state auditors, who uncovered some
accounting lapses but did not find any misappropriation or
misrepresentation of funds.

In 1981, Mr. Marks was recruited by the 64,000-student Wake County,
N.C., school district, which was eager to put a magnet system in place
to help integrate the newly merged city-county system that includes
Raleigh.

Charlotte M. Martin, a board member when Mr. Marks was hired, said
board members visited Montclair and were "captivated by what we
saw."

"The itty-bitties were speaking foreign languages, playing
instruments; the schools were racially balanced" she added. "It was
just what you would want to see."

Ms. Martin said she and her fellow board members did not
independently interview people in Montclair.

"We weren't interested in fi4nances," she said. "We were interested
in programs and desegregation and making it work and how it could be
successful."

Eventually, however, Ms. Martin and other board members became
concerned about how the magnet programs Mr. Marks set up in Wake County
were being funded.

Ann Koonce, a board member, said she had always doubted that it was
possible to do the things Mr. Marks talked about within the district's
budget.

In 1984, after an audit requested by the school board, the state
education department ordered the district to repay $489,000 in Chapter
1 money that had been used in a mathematics program that served
children who were ineligible for the federal remedial aid.

Leaves Wake County

Mr. Marks said that he himself requested the state audit and that
the money was promptly repaid. The amount, which was spent over two
years, came out of an annual budget of more than $100 million, he
noted.

Central-office administrators failed to tell principals that only
eligible students could participate in the math program, Mr. Marks
said, noting that audits of federal programs are common.

"I submit to you that I have never been in a district that did not
have audit exceptions to [Chapter 1] almost every year," he added.

Mr. Marks and the school board agreed that he should leave Wake
County.

In 1985, he became superintendent of the 1,800-student Lake Travis
Independent School District outside of Austin. Mr. Marks said board
members hired him to drum up community support for a $19-million bond
issue to build facilities.

The bond issue passed. But taxpayers in the retirement community
complain today that the buildings are too lavish, said Bonnie Siddons,
a school-board member, who said she faults Mr. Marks for "the way the
money was spent."

Mr. Marks said that the decision to build "beautiful structures" was
also made by board members, and that the projects stayed within the
approved limits.

"He had a reputation as an agent for change and innovation, and the
Band-Aid solutions we had used in our district had not worked," said
Frank R. Calton, a nine-year member of the Richmond school board.

The district was aware of the controversy over Mr. Marks's use of
federal funds in Wake County, but "we were told it was a matter of
judgment as to whether these funds were appropriately used," Mr. Calton
said.

In hindsight, he said he sees no reason why the district should not
have hired Mr. Marks, although he noted that he became the lone member
of the board to question the superintendent on budget issues.

Mr. Marks's attitude, Mr. Calton said, was: "He was the ceo, and we
either liked the way the ceo operated or we didn't. If we didn't, we
should get rid of him, but it was not the board's business to get into
areas of finance."

Whenever an examination of the district's budget showed a deficit,
Mr. Calton alleged, "the superintendent would come up with a
revenue-enhancement program that, in my mind, was even more soft
money."

Meanwhile, "He spent them into oblivion," said William L. Rukeyser,
a spokesman for the state education department, who asserted that the
explanation for the district's financial woes "can be boiled down to
two words: Walter Marks."

Legislature Responds

Mr. Marks argued last week that the Richmond district was saddled
with a budget deficit when he arrived. He asserted that state officials
share the blame for failing to provide the district with adequate
funding and for freezing state money on which the district
depended.

Noting that the district had counted on lottery revenues and
cost-of-living adjustments that never came through, Mr. Marks said, "If
I did one thing that I should not have done, I looked at best-case
scenarios in financing rather than worst-case scenarios."

As a result, Mr. Marks acknowledged, he gave district teachers
larger salary increases than the budget could bear.

After the extent of the district's financial problems became
apparent late last year, the Richmond board bought out Mr. Marks's
contract for $92,000--about half its value--and dismissed him.

A Contra Costa County grand jury empowered both to act as a public
watchdog and to issue criminal indictments is investigating the
district, Jim Sepulveda, deputy district attorney for the county,
said.

"They are not investigating any named individual," he said. "They
are investigating the whole scenerio."

Mr. Sepulveda said the panel expects its investigation, which began
last fall, to be completed this month.

Meanwhile, the office of State Controller Gray Davis is conducting
an audit of the district, which it expects to complete in November.
(See related story, page 12.)

State legislators and education department officials last week were
also taking steps to protect themselves against being ordered to bail
out other insolvent school districts.

A bill in the legislature would require districts to examine their
budgets more frequently. The measure also would grant county offices of
education the authority to step in when a district appears unlikely to
pay its bills and to appoint a county superintendent as financial
trustee with the power to override board actions.

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